Availability Bias

There are several versions of this statement, one way or another they glorify failures and in the name of exhorting startup founders these inspirational statements lead one to believe

After a few failures success is inevitable

You must fail first to succeed

Fail fast so you can succeed

Failures signal impending success

“Failure can be a true blessing in that it educates you and prepares you for success” (from here)

“Remember that most successful entrepreneurs fail good and hard before they finally make it” (same source)

All these assertions are happy to point out popular examples. The problem is the assertions are derived from the very examples they are using as evidence.

First let us make something very clear. Success and Failure are the only two possible outcomes for any venture you undertake. But the fact that there are just two outcomes does not mean they are equally probable. It is not the case of tossing a fair coin and calculating the odds of heads or tails.The chances of success and failure can be and are very different. If you take the base rate (looking at the success rate of thousands of ventures and small businesses) the success rate is 3 to 5%.

Second even if we assume that Success and Failure are equally likely, a series of failures does not mean inevitable success. Take the coin example. The probability of getting 10 Tails in a row is same as the probability of getting 9 Tails in a row followed by a Head.

Lastly the fact that those who succeeded had failed in the past is irrelevant. Those who make such an argument pick only the success stories that are popular, recent and available to them. When you only look at those who succeeded and are still in business you are leaving all those who did finally succeed and gave up or still trying without success. Even in these cited success stories success is mostly random rather than a result of their failures. The fact that those who succeeded had “failed hard” does not mean when you fail you will succeed.

Granted they learned from their mistakes but you do not have to learn from your own mistakes. You do not have to fail to learn. Failure is not the true blessing. Insane success with hundreds of billions of valuation even when your venture has no real product or clear value add is true blessing.

Those who advise you to fail are not being intellectually honest. Their advices are no different from those advising a gambler to bet on a slot machine that had been coming up empty for the past few hours.

There is considerable noise being made to discourage kids from going to college, to be “pirate”, to skip college education to start something or to follow their passion. The argument goes, “because people who started something big, Bill Gates, Steve Jobs and Mark Zuckerberg did not need college degree”.

Reporters like Sarah Lacy, instead of taking a critical look at such discussions are joining in.

@wadhwa i'd support anything my kid wanted to do. two of my brothers dropped out and my parents–TEACHERS– supported them.

I believe most are aware of the meaningful counter argument made by Vivek Wadhwa and others. Instead of repeating that I will quote what Rev. Al Sharpton said in an interview with Stephen Colbert.

May be the reporters and the likes will see the cognitive biases in their case for asking kids to drop out of college.

The interview video link is here and it is unrelated to this noise about education bubble:

Colbert: You don’t have higher education. You got your education on the streets my friend, education in the church. Why can’t we give that to children and forget about the books?
Isn’t there sir, a tyranny in this country that everything gotta be out in a book? Why can’t we let these kids fly, be free?

Sharpton: (pointing at Colbert) See this is Exhibit A why we need education.
I know. I dropped out of college. I know myself everyday the regrets I have in not pursuing my degree.

Colbert: But you have done very well sir.

Sharpton: How many people that came out of the same neighborhood that I did, that had the same background I did was able to make without an education. Most of my friends ended up in jail or dead. I want to make sure that dosn’t happen to the next generation.

Rev. Al Sharpton gets selection bias and survivorship bias.

Do Peter Thiel and Sarah Lacy get P(A|B) is not same as P(B|A)?

Do they know if tens of thousands of kids listen to them and skip college, how many will have a future like Gates, Jobs or Zuckerberg?